The Major Players in the Bankruptcy Process

With the changes that have taken place in the Bankruptcy Abuse Prevention and Consumer Act of 2005, the people involved in a bankruptcy proceeding, and their roles and responsibilities, have been altered.  Below you will find the players and what role they play in the bankruptcy process.

1.        Trustee- the main purpose of the trustee is to become the administrator of the estate with some of the duties differing in a Chapter 7 Bankruptcy and Chapter 13 Bankruptcy case. Listed below are some of the duties of each.

Chapter 7 Trustee will:

• Conduct meeting of creditors where they will ask the Debtor questions about his/her petition and financial situation.
• Investigate the debtor’s assets, claimed exemptions and the right to discharge.  For example, they will usually want to receive the debtor’s last two years tax returns.  Also, if debtor has any assets, then Trustee may or may not liquidate them to distribute the proceeds to the creditors.
• Sends required notices to parties.
• Ensures that statements of intentions are followed in some cases.

Chapter 13 Trustee will:

• Appear at hearings related to the proposed plan.
• Advise the debtor on legal and other matters concerning the bankruptcy
• Conduct Meeting of the Creditors where they will ask the Debtor questions about his/her petition and financial situation.
• Sends required notices to parties.
• Help the debtor make sure payments are made.

2.         Bankruptcy Administrator-  In all States but Alabama and North Carolina, a United States Trustee oversees the case Trustee and the overall administration of the case.  However, in Alabama, Bankruptcy Administrators were established in 1986 by the Alabama Congress to serve much the same role as the U.S. Trustee in other States.  Their duties include the following:

• Oversee the administration of bankruptcies.
• Maintain a trustee panel.
• Monitor conduct and transactions during a bankruptcy.
• Maintain a list of approved credit counseling agencies and education providers.

3.         Bankruptcy Judge –   A U.S. bankruptcy judge is a judicial officer of the U.S. District Court who is appointed by a majority of the judges of the U.S. Court of Appeals to exercise jurisdiction over bankruptcy matters.  The number of bankruptcy judges is determined by Congress.  The Judicial Conference of the United States is required to submit recommendations from time to time regarding the number of bankruptcy judges needed.  Bankruptcy judges are appointed for 14 year terms.  The bankruptcy judges also oversee and make decisions concerning any adversarial proceedings that are initiated in the Bankruptcy Court.  The Judges have many other roles such as approving a Chapter 13 bankruptcy plan, and approving certain actions requested by the Debtor in Chapter 7 bankruptcy (such as reaffirmation agreements).

4.         Creditor’s attorney – is the attorney of the company seeking payment.  They might want to determine how the Debtor is going to handle his/her secured debt and whether they will reaffirm the debt or not.

5.         Debtor’s attorney – is the attorney of the person filing for bankruptcy.  This bankruptcy lawyer should counsel the Debtor throughout the bankruptcy and file certain pleadings for them that may be necessary.  They may also perform any number of actions for the Debtor, depending on the Fee Agreement that they have and the type of bankruptcy filed.

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